Question

Double Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple’s identifiable net assets had a fair value of $390,000. The assets acquired in the purchase of Simple are considered to be a separate reporting unit of Double. The carrying value of Double’s investment at December 31, 20X4, is $500,000.

Required
Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the net assets (excluding goodwill) at that date is $440,000 and the fair value of the reporting unit is determined to be
a. $530,000.
b. $485,000.
c. $450,000.



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  • CreatedMay 23, 2014
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